Incident: The company released its 2022 report and the first quarterly report of 2023. It achieved operating income of 0.2 billion yuan in 2022 and net profit of -170 million yuan (-19.9%). Net profit returned to the mother in the first quarter of 2023 was -0.5 billion yuan (+7.1%).
SY3505 is expected to be the first domestic third-generation ALK inhibitor, and the results of the phase I/II study will be published by ASCO in 2023. SY-3505 entered clinical phase II research in July 2022, and received feedback on CDE conditional approval of marketing qualifications in March 2023, clarifying the direction of subsequent key clinical trials and registration.
A summary of the SY-3505 clinical phase I/II study will be presented at the 2023 ASCO conference.
SY5007 is expected to be the first domestically produced selective RET inhibitor. The critical phase II clinical trial completed the first patient enrollment in February 2023. In January 2023, CDE agreed to apply for conditional listing of SY-5007 for RET-positive NSCLC patients using phase II single-arm clinical trials in the future. As of February 3, 2023, a total of 60 subjects were enrolled in the SY-5007 clinical phase I study. Patients included RET-positive non-small cell lung cancer, thyroid cancer, and other solid tumors. A summary of the SY-5007 clinical phase I study will be presented at the 2023 ASCO conference. The SY-5007 critical phase II clinical trial completed the first patient enrollment in February 2023.
The second-generation ALK SY-707 has begun pre-NDA communication with CDE on pharmaceutical research. The key phase II clinical trial of SY-707 for crizotinib resistant NSCLC patients was enrolled in August 2022 (the first-line trial of ALK-positive first-time patients was completed at the end of 2021). The company has initiated pre-NDA communication with CDE on the pharmaceutical research part. Also, the phase IB/II clinical treatment of advanced pancreatic cancer with SY-707 combined with treprilizumab and gemcitabine was officially launched in June 2022.
The abundance of research pipelines shows excellent independent research and development capabilities, and many new drugs have entered the first tier of domestic production. The company has received 17 national clinical approvals for Class 1 innovative drugs. Of these, 1 new drug has been declared for marketing, entered 3 key phase II/III clinical trials, 3 phase II clinical trials, and 10 phase I clinical trials. It includes not only popular mature targets, such as ALK inhibitors and BTK inhibitors, but also emerging targets, such as “unlimited cancer types” target FGFR4 inhibitor SY-4798, and pan-tumor target WEE1 inhibitor SY-4835.
Profit forecasts and investment recommendations. It is estimated that the company will achieve operating income of about 0.02 billion, 100 and 230 million yuan respectively in 2023-2025. Considering the strong early research strength of First Pharmaceutical Holdings and the continuous improvement of clinical capabilities, the first new drug, SY-707, is about to submit a marketing application, SY-3505 and SY-5007 are ready to go. The company's pipeline valuation is about 10.29 billion yuan, corresponding to the target price of 69.18 yuan, maintaining the “buy” rating.
Risk warning: R&D or review and approval progress falls short of expected risks, increased market competition risks, policy risks in the pharmaceutical industry, etc.